Good morning friends!
Corn (N17) 359’2 unch
Soybeans (N17) 911’4 +’6
Chi Wheat (N17) 452’4 -‘6
KC Wheat (N17) 457’2 unch
Cotton (Z17) 66.90 -.81
Good morning friends!
It was pretty quiet here in Chicago last night, prices were within a few pennies of unchanged across the CBOT. Up in Minneapolis though, we saw prices for Spring wheat continue to push toward 7.00 with December futures now trading at 6.90, a new high for the move that has been going on for a full 40 days now. The weather is pretty solid across the soybean and corn belt of late but heat is on its way, and with it I expect prices for corn and beans to make a push back into the upper end of the ranges they traded in the early part of June. Look at buying August or September short dated options (derivative of December futures) on breaks today. I am targeting the Aug 390 call for 6-0 cents, but others might prefer something longer dated. For soybeans I like the September 10.00 call.
Models are in agreement about this heatwave approaching, where it is centered is still up in the air. Right now it appears to be more westward, which could bring rain into the eastern corn belt but to be honest that corn stinks right now. It probably needs it but top end yield is gone anyway according to guys I work with east of the Illinois-Indiana border. I am more concerned about what happens to NW Iowa/SE Minn/SW SD if the ridge is west. Regardless, I think the markets are set up for uncertainty which should be good for price in my opinion.
It is hard to predict what happens with the Spring wheat prices, but I have to imagine we do not see an end of this rally on hot and dry. I think KC wheat will follow eventually, but I imagine we are seeing a lot of delivery pressure right now. That has widened spreads between Minny and KC wheat to levels not seen since 2011. July spreads sit at 230, the high that year was 250. If you are long that spread, a potential profit point lies there.
Lastly, cotton. The market of late 2016, early 2017 where cotton was up and the CBOT was lower has flipped on its head, the CBOT now holds leadership. I remain short December hedges, but will look to lift on the close of the price gap just below 66.00. I look for bearish news from the acreage report on Friday but I would buy that fact. July is performing into delivery, that keeps me hopeful for another run toward 70.00 before we harvest. Texas weather is now a slight concern, the heat will not help that even against the recent rains.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.